U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2004
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 0-49789
Henry County Bancshares, Inc.
(Exact name of registrant as specified in its charter)
| Georgia | 58-1485511 | |
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
4806 N. Henry Blvd., Stockbridge, Georgia 30281
(Address of principal executive offices)
(770) 474-7293
(Issuer’s telephone number)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) Yes x No ¨
State the number of shares outstanding of each of the issuer’s classes of common equity, as of November 5, 2004: 7,160,992; $2.50 par value
HENRY COUNTY BANCSHARES, INC AND SUBSIDIARIES
INDEX
| Page | ||||
| PART I. | FINANCIAL INFORMATION | |||
| Item 1. Financial Statements | ||||
| Consolidated Balance Sheets - September 30, 2004 and December 31, 2003 |
3 | |||
| 4 | ||||
| Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2004 and 2003 |
5 | |||
| 6-8 | ||||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 9-15 | |||
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 16 | |||
| Item 4. Controls and Procedures | 16 | |||
| PART II. | OTHER INFORMATION | |||
| Item 4 - Submission of Matters to a Vote of Security Holders | 17 | |||
| Item 6 - Exhibits and Reports on Form 8-K | 17 | |||
| Signatures | 18 | |||
| Certifications | ||||
2
PART I - FINANCIAL INFORMATION
HENRY COUNTY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2004 AND DECEMBER 31, 2003
(Unaudited)
| 2004 |
2003 |
|||||||
| Assets |
||||||||
| Cash and due from banks |
$ | 17,532,034 | $ | 25,198,796 | ||||
| Interest bearing deposits in banks |
116,913 | 571,884 | ||||||
| Federal funds sold |
— | — | ||||||
| Securities available-for-sale, at fair value |
54,349,925 | 56,499,855 | ||||||
| Securities held-to-maturity, at cost, (fair value 2004 $454,000; 2003 $598,000) |
439,377 | 572,369 | ||||||
| Restricted equity securities, at cost |
1,467,473 | 983,473 | ||||||
| Loans held for sale |
1,287,705 | 1,673,368 | ||||||
| Loans |
473,148,826 | 418,637,070 | ||||||
| Less allowance for loan losses |
4,502,304 | 4,178,472 | ||||||
| Loans, net |
468,646,522 | 414,458,598 | ||||||
| Premises and equipment |
9,225,603 | 9,099,287 | ||||||
| Other assets |
6,660,602 | 6,079,703 | ||||||
| Total assets |
$ | 559,726,154 | $ | 515,137,333 | ||||
| Liabilities and Stockholders’ Equity |
||||||||
| Deposits |
||||||||
| Noninterest-bearing |
$ | 85,637,395 | $ | 81,309,482 | ||||
| Interest-bearing |
383,052,548 | 345,723,652 | ||||||
| Total deposits |
468,689,943 | 427,033,134 | ||||||
| Other borrowings |
33,238,986 | 34,835,265 | ||||||
| Other liabilities |
2,417,458 | 1,884,542 | ||||||
| Total liabilities |
504,346,387 | 463,752,941 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity |
||||||||
| Common stock, par value $2.50; 10,000,000 shares authorized; 7,237,065.6 shares issued |
18,092,664 | 18,092,664 | ||||||
| Capital surplus |
739,560 | 739,560 | ||||||
| Retained earnings |
37,854,037 | 33,661,983 | ||||||
| Accumulated other comprehensive income |
86,922 | 283,601 | ||||||
| Treasury stock |
(1,393,416 | ) | (1,393,416 | ) | ||||
| Total stockholders’ equity |
55,379,767 | 51,384,392 | ||||||
| Total liabilities and stockholders’ equity |
$ | 559,726,154 | $ | 515,137,333 | ||||
See Notes to Consolidated Financial Statements.
3
HENRY COUNTY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
||||||||||||
| Interest income |
|||||||||||||||
| Loans |
$ | 6,800,135 | $ | 5,890,737 | $ | 19,629,623 | $ | 17,605,903 | |||||||
| Taxable securities |
363,080 | 273,879 | 1,031,383 | 989,336 | |||||||||||
| Nontaxable securities |
81,578 | 110,601 | 259,993 | 344,371 | |||||||||||
| Deposits in banks |
582 | 5,359 | 5,936 | 18,884 | |||||||||||
| Federal funds sold |
11,954 | 70,960 | 38,140 | 159,557 | |||||||||||
| Total interest income |
7,257,329 | 6,351,536 | 20,965,075 | 19,118,051 | |||||||||||
| Interest expense |
|||||||||||||||
| Deposits |
2,242,535 | 2,096,119 | 6,498,917 | 6,452,881 | |||||||||||
| Other borrowings |
294,355 | 260,444 | 837,846 | 690,872 | |||||||||||
| Total interest expense |
2,536,890 | 2,356,563 | 7,336,763 | 7,143,753 | |||||||||||
| Net interest income |
4,720,439 | 3,994,973 | 13,628,312 | 11,974,298 | |||||||||||
| Provision for loan losses |
103,000 | 100,000 | 398,000 | 400,500 | |||||||||||
| Net interest income after provision for loan losses |
4,617,439 | 3,894,973 | 13,230,312 | 11,573,798 | |||||||||||
| Other operating income |
|||||||||||||||
| Service charges on deposit accounts |
590,749 | 608,848 | 1,719,334 | 1,737,697 | |||||||||||
| Other service charges and fees |
239,513 | 228,957 | 669,063 | 693,691 | |||||||||||
| Mortgage banking income |
249,377 | 491,851 | 892,242 | 1,767,459 | |||||||||||
| Gains on sales of securities |
— | — | 2,500 | — | |||||||||||
| Total other income |
1,079,639 | 1,329,656 | 3,283,139 | 4,198,847 | |||||||||||
| Other expenses |
|||||||||||||||
| Salaries and employee benefits |
1,473,228 | 1,526,638 | 4,267,684 | 4,504,101 | |||||||||||
| Occupancy and equipment expenses |
408,462 | 362,613 | 1,148,222 | 1,094,878 | |||||||||||
| Other operating expenses |
544,383 | 537,443 | 1,628,488 | 1,630,473 | |||||||||||
| Total other expenses |
2,426,073 | 2,426,694 | 7,044,394 | 7,229,452 | |||||||||||
| Income before income taxes |
3,271,005 | 2,797,935 | 9,469,057 | 8,543,193 | |||||||||||
| Income tax expense |
1,103,076 | 1,024,474 | 3,343,535 | 3,127,025 | |||||||||||
| Net income |
2,167,929 | 1,773,461 | 6,125,522 | 5,416,168 | |||||||||||
| Other comprehensive income (loss): |
|||||||||||||||
| Unrealized gains (losses) on securities available-for-sale, net of tax |
252,841 | (156,331 | ) | (196,679 | ) | (248,905 | ) | ||||||||
| Comprehensive income |
$ | 2,420,770 | $ | 1,617,130 | $ | 5,928,843 | $ | 5,167,263 | |||||||
| Earnings per share |
$ | 0.30 | $ | 0.25 | $ | 0.86 | $ | 0.76 | |||||||
| Weighted average shares outstanding |
7,160,992 | 7,160,992 | 7,160,992 | 7,160,992 | |||||||||||
| Cash dividends per share |
$ | 0.09 | $ | 0.08 | $ | 0.27 | $ | 0.24 | |||||||
See Notes to Consolidated Financial Statements.
4
HENRY COUNTY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
| 2004 |
2003 |
|||||||
| OPERATING ACTIVITIES |
||||||||
| Net income |
$ | 6,125,522 | $ | 5,416,168 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation |
407,624 | 364,892 | ||||||
| Gain on sale of securities available for sale |
(2,500 | ) | — | |||||
| Net decrease in loans held for sale |
385,663 | 4,674,667 | ||||||
| Provision for loan losses |
398,000 | 400,500 | ||||||
| (Increase) decrease in interest receivable |
(413,840 | ) | 107,456 | |||||
| Increase (decrease) in interest payable |
61,737 | (91,434 | ) | |||||
| Net other operating activities |
405,438 | 608,145 | ||||||
| Net cash provided by operating activities |
7,367,644 | 11,480,394 | ||||||